In Biloxi, when the economy turns the corner, we’ll find a new road

December 17, 2008

Here is the text of a forecast of gaming in Biloxi for 2009 Mayor A.J. Holloway submitted for the January issue of Casino Enterprise Management magazine.

We’ve seen our share of layoffs in the Biloxi casino industry – about 10 percent of the workforce, I would say — but I can’t help but believe that sometime in 2009 we’ll be turning the corner and when we do, we’ll literally see a new-and-improved thoroughfare awaiting us in Biloxi.

Talk to analysts in the local casino industry and they’ll tell you we’ve been seeing casino operators here “right sizing” to prepare for a year of little if any growth. I think we’ll see some months that will be higher than the corresponding month of the previous year, and we’ll see some that will be lower.

The bottom line, I think, is that we’ll see no growth for the short term.

One of the interesting things about the casino industry here in Biloxi, I believe, is that it’s a good barometer of our economy.

The casino industry reacts quicker to changes. Casinos measure their numbers on a daily, weekly and monthly basis. They have the benefit of real time information and they use that information to right size, either through attrition or layoffs.

Make no mistake, however: I do believe they are making money, but perhaps not on par with the figures just before Katrina in August 2005.

On one hand, the Biloxi market is not as vulnerable to the current national economic downtown because of the millions of dollars in reconstruction funds being poured into our area. Locally, we can also take some solace in the impact of our military community, Keesler Air Force Base, which is generally immune to economic downturns.

On the other hand, what happens in Vegas doesn’t necessarily stay in Vegas. That is, when belt-tightening occurs at Harrah’s or MGM Mirage in Las Vegas, it also means those operators are tightening belts at their operations in places like Biloxi.

What I can say is that once the national economy rebounds – and it will – Biloxi will be poised to capitalize.

When the insurance, construction and credit markets correct themselves, we will be well into making the huge infrastructure improvements from Hurricane Katrina.

Right now, contractors are in the final phases of a $90 million reconstruction of U.S. 90, the highway that laps the length of the Mississippi Gulf Coast. The city itself is in the initial phases of a $355 million project that will see the reconstruction or repair of 100 miles of city streets, and water, sewer and drainage lines.

The fact is, if it went underwater in Katrina, we’ll be replacing or repairing it.

As I’ve said before and since Katrina, our work in municipal government is to set the table for economic development, and we’ll be well on our way to having that table set once this economy turns around.